CHAPTER 9
Diversity Management
Other Forms of Diversity and Subcultures
In chapter 5 we discussed the development and functioning of a particular subculture, namely corporate culture, in which values (or at least practices) were shared by people composing them.
In this chapter we will explore the impact of other subcultures and their insertion into companies. Diversity, when appropriately managed, can easily translate into profit maximization, greater production, and overall satisfaction. Needless to say, it is the greatest generator of creativity. On the other hand, when a company does not profit from this asset, it immediately becomes a liability, creating cost, loss of opportunities, and sometimes even very expensive and complicated lawsuits.
An Introduction to Diversity Management
As a result of demographic changes like immigration, the steady rise in women’s labor participation, and the aging population, the workplace is getting increasingly diverse. These changes require managers able to deal with employees who differ from one another in terms of gender, culture, ethnicity, age, sexuality, and physical ability. Over the past decades different approaches have been used to deal with these differences. These different approaches will be outlined briefly below.
Approaches to Diversity: From Assimilation to Pluralism
In the past, the diverse backgrounds, experiences, skills, values, norms, and behaviors of employees were not valued. Organizations even tried to eliminate the differences between employees, a process called assimilation. New employees of an organization were socialized in such a way that they would reject their own norms, values, beliefs, and practices and embrace those of the organization. Organizations that value assimilation over diversity emphasize the need to create a homogeneous organization instead of capitalizing on the differences that make their employees unique and valuable. This is called the melting pot approach.
The other approach is called the salad bowl approach and refers to the concept of pluralism. Pluralism and assimilation are each other’s opposite on the acculturation continuum. Pluralism is the acculturation process by which employees assimilate a limited number of norms, values, beliefs, and practices while preserving important aspects of their identity. Here, individuals are encouraged to bring their unique background, experiences, and personality to the workplace. This approach is called the salad bowl approach because we can still “see” the different parts of which the salad was made, while the different “ingredients” of the melting pot have become invisible.
Approaches to Diversity: From Affirmative Action to Inclusion
Although the need for a diverse workforce has been acknowledged for quite a while, the reasons behind the diversity efforts have changed. With the arrival of antidiscrimination laws organizations had to find ways to comply with the legal requirements. Diversity management was nothing more than a legally defensive position. An organization with a diverse workforce could argue that they were not guilty of discrimination based on their workforce demographics representing the demographics of the local community. This is called affirmative action (AA) or representational diversity, where different minority groups are “represented” in the organization by meeting the quotas for the employment of different minorities. Although this does increase diversity at the workplace, it does not necessarily mean that the employees that belong to a minority feel included and appreciated or occupy positions at the same hierarchical level as employees that do not belong to minority groups. In other words, diversity was not managed properly. Managers had to learn how to communicate effectively with individuals from diverse backgrounds, mentor and guide them, and create an organizational culture of inclusion where all employees feel valued in order to be able to reap the benefits of a diverse workforce. A need for an inclusive culture emerged.
Visible or Invisible: Representational Versus Behavioral Diversity
Definitions of diversity tend to be very restricted to visible features and characteristics of individuals, concealing the intense diversity that less obvious individual differences can bring to the workplace. A broader and more complex definition of diversity does not just incorporate such characteristics as gender, skin color, physical ability, socioeconomic background, age, or sexual orientation. There are other, usually less immediately obvious characteristics held by individuals at work that make workplaces rich with diversity and difference.
It was argued that representational diversity would not lead to the suggested benefits of diversity since having a certain percentage of women, Jews, or employees over the age of 50 does not imply that these employees differ from one another in behavioral aspects. Relying on the visible aspects is nowadays increasingly seen as inappropriate to enhance diversity.
Organizations are starting to recognize that behavioral diversity, as the opposite of representational diversity, is the type of diversity they are looking for. Behavioral diversity does not look at the visible aspects of their employees, but wants employees who differ from one another in terms of personality, ways of dealing with conflict and decision making, ways of communicating, methods of learning, levels of motivation or stress, and task related ideas or inputs. All of these differences may be either unrelated, or only loosely linked to the more conventional indicators of diversity. Behavioral diversity is therefore increasingly being advocated by organizations that wish to benefit from a truly diverse workforce.
Advantages of Diversity
Over the past few years, the issue of diversity management has attracted a great deal of business and academic interest. Business academics and practitioners alike have argued that promoting diversity in the workplace can be a source of sustainable competitive advantage. A sustainable competitive advantage should be valuable, rare, imperfectly imitable, and nonsubstitutable. Human and organizational capitals especially, such as an organizational culture, are difficult to imitate and therefore most suitable to obtain a sustainable competitive advantage. Experts contend that organizations can leverage real business benefits if they recognize, celebrate, and build on their employees’ differences in gender, race, sexual orientation, religion, age, personality, and other demographic or psychosocial factors.
One advantage of an organization with a diverse workforce is that it can attract top quality talent from increasingly diverse labor pools. It is suggested that the best people from all demographic and cultural groups will be attracted to those organizations that appreciate the value they bring to the workplace. For example, the Dutch bank Rabobank has implemented several policies on diversity with the result that it has successfully increased its talent pool.
Once recruited, these diverse employees bring a number of benefits to the company. They have the ability to relate more effectively and sell to markets that are themselves multicultural and diverse. Armed with a diverse pool of employers, it is argued, companies can have access to better information on how to reach previously untapped markets. The diversity efforts of IBM are a case in point. By recruiting a more diverse workforce, the company was able to tap the knowledge of its minority employees and target new, profitable markets.
A diverse workforce can solve problems more creatively, innovate more powerfully, and can generally enhance their corporate image and reputation. The diversity policy pursued by Randstad, a recruitment consultancy, has contributed to a high percentage of employee satisfaction (98%), and to high numbers of temporary workers who would recommend Randstad (97%). The competitive advantage of this level of satisfaction, and thus the enhancement of their reputation, is clearly visible in the company’s continuous growth in market share.
Barriers to the Implementation of a Diversity-Friendly Policy
In Europe, the implementation of policies and practices that can enhance diversity is often a problem since there exist considerable hurdles to the effective implementation of the business case for diversity. As reported in successive surveys conducted by the European Business Test Panel, the introduction in European companies of equality and diversity policies has been inhibited by organizational barriers, including confusing strategies, a lack of time and financial resources, and an absence of strategic guidance.
Other researchers find that, in Europe, the proliferation of diversity management practices is being impeded by a lack of managerial support, failure to empower employees and include them in decision-making processes, differing expectations, stereotyping, lack of mentoring and access to formal and informal networks, isolation and soloing, and tokenism. Traditional human resource management systems constitute another barrier to diversity because in many cases, the organization’s historical methods of recruiting, motivating, and retaining workers are more conducive to homogeneity.
Organizational culture can also form a barrier. A strong organizational culture in itself is not necessarily good or bad for diversity. However, some cultures may constitute a barrier to diversity because of the content of their core values. If at its core, the organization has a strong culture that values competitiveness, aggressiveness, dominance, and interprets supportiveness or gentleness as weakness, many employees from minority groups may experience the organization as intimidating and unwelcoming.
But organizational barriers are not the only type of barriers. Psychological or human barriers can also play an important role. The preference for similar others is a human barrier to diversity. In this regard, research has shown that culturally and demographically homogeneous groups develop good working relationships more quickly than heterogeneous groups, with the result that homogeneous groups reach performance targets earlier than heterogeneous groups do.
A second human barrier to diversity is the impact of social identity. Social identity theory assumes that the status relations between social groups are often unequal, and that social groups are in competition with each other for status and power. Individuals have multiple selves or identities dependent on the context and this identification as a member of a certain social group influences their behavior or attitudes. Turner’s social identity theory is linked to the theory of self-categorization since individuals develop a social identity through the process of self-categorization. Through self-categorization and group membership, individuals develop a social identity, which serves as a social-cognitive schema for their group-related behavior. Choosing a certain social identity also has consequences such as stereotyping, prejudice, discrimination, and conflict. Discrimination towards members of socially devalued groups by members of high-status social groups can be considered a form of social rejection. Experiencing social rejection in the form of perceived discrimination may deprive individuals of their need to belong and negatively influences in-group evaluations, both of which can have negative psychological consequences. Social identities are so important to people that they will work to enhance the status of the social groups to which they belong in order to maintain a positive self-image. Members of high-status groups are considerably more likely to discriminate against low-status out-groups than the reverse, and members of low-status groups will often discriminate in favor of the high-status out-group.
Social identity groups also develop images or stereotypes of each other. Stereotypes of low-status groups are often negative. Stereotypes are activated automatically and unconsciously when people come into contact with members of other social groups. People have an automatic negative reaction to low-status group members. Even people with the best intentions are influenced by the automatic activation of unconsciously held negative stereotypes about low-status groups. The automatic activation of stereotypes can pose a barrier to the recognition of people’s qualifications and achievements.
Linked to the above mentioned barrier of stereotypes is the problem of discrimination, the different treatment of individuals or groups based on arbitrary ascriptive or acquired criteria such as sex, race, religion, age, marital or parental status, disability, sexual orientation, political opinions, socioeconomic background, and trade union membership and activities.
Methods That Facilitate Integration
Although an increasing number of organizations acknowledge the benefits of a diverse workforce, there are also many barriers to overcome. Several methods can be used to facilitate the integration of minorities at the workplace.
One facility organizations can offer is support policies. In order to facilitate the achievement and performance of certain minority groups, organizations need to acknowledge and adjust to the additional challenges that may be relevant to certain specific dimensions of diversity. Women, racial minorities, people with disabilities, older employees, and so on may face difficulties that are not faced by other members of the organization.
Secondly, organizations have to recognize that their employees live different lives. Lifestyle diversity is of increasing importance, since society knows an increasing number of mono-parent families or dual-earning families and more and more employees express the need for a better work-life balance. Childcare resources, flexible working arrangements, buildings designed for people with disabilities, and so forth will have to be made available.
Furthermore, stereotypes and other barriers can obstruct the participation or performance of minority employees. The development of networks, mentors, and role models for diverse group members is an important dimension of organizational development initiatives designed to support and manage diversity.
Diversity training can also help the effective integration of minority groups in an organization. This type of training should start by increasing the awareness of the different challenges faced by different employees within the organization and the stereotypical attitudes employees have about the different groups in their organization. After the awareness-based part of the training, a competence and skills based training is necessary in order to work successfully together. Employees should keep their unique characteristics while avoiding damaging processes such as dysfunctional interpersonal conflict, miscommunication, higher levels of stress, slower decision making, and problems with group cohesiveness.
Women in International Business
The participation of women in the workforce is increasing. However, women do face different challenges than their male colleagues at work. The glass ceiling, stereotypes, career interruptions, and their leadership style will be discussed.
Glass Ceiling
The glass ceiling refers to the invisible barrier that keeps women and minorities from rising above a certain level in corporations. Beliefs and attitudes held by organizational members, as well as contextual aspects of the organization contribute to the barriers that impede women’s career advancement. The following barriers can be identified: perceptions and stereotyping, corporate climate, and corporate practices.
Many negative perceptions and stereotypes about women exist. These can lead to a self-fulfilling prophecy where women start behaving in accordance with these stereotypes. The lack of role models forms a related barrier to career advancement.
The corporate climate is often hostile, or at least unreceptive, towards diversity. In most organizations that are male-led, the good old-boy network still exists, and women have been largely excluded from these networks. The benefits of informal networking are well acknowledged as important to upward mobility, including information exchange, career planning, professional support, and increased visibility. Also, care responsibilities make it difficult for women to be present at important occasions.
Corporate practices form another barrier for women, since women get assigned those positions considered suitable for women, decreasing their chances of promotion and career advancement. The lack of mentors here is an important barrier, since mentoring is an important factor of a successful career.
There are some initiatives that organizations can take to reduce or remove these barriers. First of all, a change in organizational culture and corporate practices is needed if an organization wants to keep talented women. Readdressing human resources policies and practices and changing the organizational culture and executive attitudes should help organizations retain highly talented women. Policies that support the promotion of qualified women to management positions are also needed. Finally, organizations should clearly communicate their commitment to diversity and act accordingly.
Occupational Segregation
Gender is strongly associated with job segregation with women’s work and men’s work being highly segregated according to both job types and organizational level. Occupational statistics demonstrate that there is a persistently unequal distribution of males and females throughout all ranges of occupations, and that this is an almost worldwide phenomenon. Males and females are both over-represented in particular organizational roles and levels of authority. Men tend to be highly concentrated in the higher-ranking professions, while women tend to be over-represented in the lowest-ranking and lowest paid professions in the workforce. This segregation of women into less prestigious and lower-ranked jobs also decreases their chances of being promoted and their access to insurance, benefits, and pensions.
A distinction can be made between horizontal segregation and vertical segregation. Horizontal segregation deals with the idea that men and women possess different physical, emotional, and mental capabilities. These different capabilities make the genders vary in the types of jobs they are suited for. Vertical segregation occurs as occupations are stratified according to the power, authority, income, and prestige associated with the occupation and women are excluded from holding such jobs.
Occupational and hierarchical segregation can be explained by individual choice, institutional structures, employer’s choice, and “in-group” protectionism. That segregation is the result of individual choice is debatable, since institutional influences can constrain individual choice to such an extent that the idea of choice is simply the outcome of institutionally patterned actions. Segregation is often attributed to the processes of employer choice and active discrimination in hiring practices and can also be explained as a result of the power of “in-groups” to prohibit the admission of “out-group” members.
Gender Discrimination
The law recognizes four forms of gender discrimination: direct sex discrimination, sexual harassment, indirect sex discrimination, and victimization.
Direct sex discrimination is the less favorable treatment of a woman based on her sex.
Sexual harassment is defined as unwanted behavior that takes place simply based on gender, with the purpose of, or having the effect of, violating the person’s dignity, or it creates an intimidating, hostile, degrading, humiliating, or offensive environment.
Indirect sex discrimination occurs when an employer applies a provision, criterion, or practice equally to both women and men that puts one sex at an unfair disadvantage. Because more women than men have family responsibilities and wish to work part-time, a policy that everyone has to work full-time can amount to indirect sex discrimination as it would put women at a particular disadvantage.
Victimization occurs when one is treated less favorably than others because he/she makes a complaint of discrimination or supports someone else to do. If you are denied promotion or training or are moved away from your usual workplace because of your involvement in a complaint of sex discrimination, this may be considered victimization.
Gender discrimination, like other forms of discrimination can lead to a decrease in job satisfaction, productivity, motivation, and performance, while it might increase absenteeism, turnover, and conflict. If gender discrimination is communicated outside the organization, it might damage its corporate image as well as run the risk of a lawsuit.
Pay Inequity
Wage discrimination is the discrepancy of wages between two groups due to a bias towards or against a specific trait with all other characteristics of both groups being equivalent. Women are paid less than men with the same qualifications, work experience, and having the same position. The pay inequity between men and women differs from country to country but ranges from 10% to 60%.
Career Interruptions
Pregnancy and maternity leave are issues that only concern women, making them prone to discrimination based on this matter. Common forms of this type of discrimination are not being hired or promoted when pregnant or being at an age where pregnancy is likely to happen in the near future, being fired or demoted after informing an employer of one’s pregnancy, or being fired after one’s maternity leave as a result of an expected loss in productivity.
Leadership Style
A trend towards flattening organizations, globalization, and a change more feminine organizational values can be identified, asking for a different leadership style. Men are thought to have a competitive, authoritative, transactional leadership style, compared to women who seem to place more emphasis on communication, empathy, relationships, advanced intermediary skills, interpersonal skills, and a soft approach to handling people. Although the feminine, transformational leadership style is getting recognized and valued, many organizations still embrace a “male-oriented” management style, where direct and aggressive behavior is the norm. However, when women embrace this style, they are frequently labeled as “bossy” and “pushy,” whereas men using the same behaviors are labeled “leaders.” Women report the perception that if they adopt a “feminine” managerial style, they run the risk of being viewed as ineffective, and if they adopt a “masculine” style, they will be criticized for not being feminine.
Disabled Colleagues in International Business
During the past few decades employers and government authorities have made increasing attempts to advance the participation and integration of disabled people in working life. This ranges from government legislation to company training programs for disabled people and company recruitment strategies targeting disabled job seekers.
However, barriers for employees with a disability still exist and workplace accommodations are difficult to implement as a result of the diversity within this group of employees.
Barriers for Employees With a Disability
Disabilities is an umbrella term, covering impairments, activity limitations, and participation restrictions. An impairment is a problem in body function or structure, an activity limitation is a difficulty encountered by an individual in executing a task or action, while a participation restriction is a problem experienced by an individual in involvement in life situations. Thus disability is a complex phenomenon, reflecting an interaction between features of a person’s body and features of the society in which he or she lives. It should be stressed, however, that having a disability also carries a social stigma from which employees with a disability suffer because they fail to meet the norms of society.
Furthermore, social and material barriers also continue to exclude disabled people from the labor market and segregate disabled employees in work organizations. However, the small proportion of disabled people that is employed in paid work is rarely to be found in professional and managerial occupations. They are mostly to be found in semi-skilled and unskilled occupations, routine clerical and personal service work, and they are overrepresented in the rising numbers working from home.
Legislation
Discrimination based on disability is prohibited. In several countries laws have been voted for that state that organizations have to hire a certain percentage of employees with a disability. Organizations that feel to meet these quotas have to pay a fine. Although the percentage of employees with a disability is rising, there are still many organizations that prefer to pay instead of hiring disabled employees.
Workplace Accommodations
Organizations try to improve the employment opportunities of disabled people by increasing awareness about disability and disabled employees through making training about disability compulsory for colleagues and/or clients so they will feel comfortable interacting with disabled employees and by providing adaptations to disabled individuals or groups. The problem is that employees with a disability are an extremely heterogeneous group. The organizational adjustments to accommodate disability are costly, and initiatives aimed at enabling one disabled person may disable another.
Perception of Age in International Business
The workplace is aging. The active workforce is decreasing while the retired workforce increases rapidly. Many countries have decreased the official retirement age during the economic growth and the changing welfare philosophy of the past few decades. However, in the light of the aging population, this and other work-related issues are currently open to debate and it is clear that people will have to continue working for more years than in the past. However, although governments are taking measures to encourage people to keep on working, the current facilities and mentality at the workplace are not yet adapted to such a dramatic increase of older employees.
While age is valued and respected in certain Asian countries, it is viewed rather negatively in Europe where age discrimination is a serious issue.
Age Discrimination
Discrimination can be defined as the actions arising from institutions and individuals that disproportionately and systematically harm members of socially marginalized groups. Ageism or age discrimination is described as a process of systematic stereotyping of and discrimination against people because they are old or young, just as racism and sexism accomplish this for skin color and gender.
Age discrimination is based on the perception and attitudes people have regarding older employees. Clearly, these perceptions are quite negative. Older employees are believed to be less flexible and innovative, more resistant towards change, less motivated and energetic and less willing to take training opportunities, learn new skills, or new technology. As a result, older employees have fewer economic opportunities and therefore remain the most underrepresented group in the labor market. The only positive characteristics that are attributed to older employees are that they are seen as loyal and reliable.
Age discrimination has been linked to many negative psychological and organizational outcomes, like stress, distress, and functional limitations, lower job security, lower chances of promotion or receiving bonuses, reduced self-esteem, job satisfaction, job performance, affective organizational commitment, job involvement, and feelings of personal control.
Furthermore, older employees sometimes internalize the ageist assumptions and beliefs of others where they work, which influence their own attitudes and expectations. The perception of older employees that their accomplishment do not lead to career advancement as a result of these prejudices can have a negative influence on their motivation, thereby validating the stereotypes held by managers.
Age discrimination is high in someone’s 20s, drops in the 30s, and peaks in the 50s. Age discrimination also interacts with other forms of discrimination, like gender, race, and class. It seems that women disproportionately experience age discrimination at the workplace, being doubly disadvantaged.
Workplace Accommodations
Many older employees wish to continue working if only their specific skills, knowledge, and experiences would get recognized and respected. Although many negative stereotypes exist about older employees, they do bring different values, skills, experiences, and ways of working to the work floor. Older employees have expressed the wish to transfer their knowledge and skills to younger employees, occupying a different social role in the organization such as being a mentor or a trainer. Facilities to reduce physically hard work are also appreciated as well as more flexibility, freedom, and autonomy regarding the execution of tasks, their working hours and the wish to balance work and personal life.
Using This Information
Diverse organizations are more productive when they manage to use this characteristic as an asset instead of fighting it as if it was a liability.
Working with minorities of any sort may be difficult for someone who is not used to it, because the exercise indeed represents a challenge to be overcome. The same way it must have been difficult for primary school teachers to switch from one-gender schools into coeducational ones, or the same way it must have been difficult to deal with female managers at some point in the twentieth century, it is still very difficult for teams to work with those who are different in some way.
This chapter should provide tools on how to deal with diversity in order to turn it to business advantage. Not because it is socially responsible, but because it can generate profit, enhance fairness, and greatly contribute to innovation and creativity.
Exercise
Reflect upon the social and economic cost of not promoting a diverse workplace.